10 Companies that wow us - Part II (Yahoo!)
OK, we’ve already covered my
#10 pick (Logitech), and most everyone agreed with my analysis (
read comments). So now I’ll progress on to my #9 pick as I move up the list. In each series I’ll list the good, the bad, and the ugly (if applicable) of each – including annotations on what they both do best and worst. Who has the best chance to move higher up the latter? Who is in danger of failing with consumers? Who has burst onto the scene like a bat out of you know where? Let’s take a look.
#9. Yahoo! - A lot of readers might call ‘foul’ when they see me ranking Yahoo! as number nine on the list instead of higher up. But I honestly had to justify putting Yahoo! on the list at all; though it’s simply hard to ignore the worlds most visited website when making this list. Plus, Yahoo! is like a grandfather figure on the internet, when haven’t they been there? I grew up with these guys.
Dating back to the year Yahoo! was incorporated, 1995 if you can believe it, they’ve been one of the most highly recognized names on the internet. Once the search engine king, with only Microsoft as a serious rival (amongst a sea of smaller contenders), Yahoo ruled the internet. Over the last 10 years, Yahoo! has given people a reason to say “wow” with services like their webmail service (previously Four11), directory, games (previously ClassicGames.com), Yahoo! groups (previously eGroups), Yahoo! messenger, hosting (previously GeoCities) and news. Honestly, Yahoo! just made sense to bookmark as your homepage. Of course, things change – and you know the rest of the story I’m sure.
Instead of telling you what you DO know about Yahoo!, how about I tell you something things you might NOT know. For starters, if you don’t include the “!” at the end of the name, you might get yourself into hot water with the other copyright holders – companies that vary from a manufacturer of a watercraft device to one that produces barbecue sauce. Yahoo! as a trademark must include the exclamation mark at the end. I had to make sure I included it every time I typed the word (and I’m sure I missed one or two).
You may recall that in 2000, during the height of the dot-com bubble, Yahoo! and eBay were extremely close to forming a 50/50 merger. While the merger never happened, the relationship was recouped six years later through a lucrative advertising arrangement. In light of recent events (the Google/eBay spat), this may prove to be quite significant for Yahoo! in the coming months. eBay is one of the worlds largest advertisers – trust me – you want to be their friend.
It was perhaps the same year that Yahoo! made their first blunder, perhaps unknowingly at the time. In June 2000, Yahoo! signed a deal with an up and coming company called “Google” to exclusively offer their search results. The previous year a beta trial had been tested and the deal seemed like a smart move. Hindsight might prove otherwise.
To give you an idea of how much Yahoo! has changed since 2000, consider that during January 2000, their stock was sold for a record $475.00 a share. And despite being one of the few to survive the dot-com bubble burst, their shares had fallen to $8.11 by September 26 the following year (a common them in the post 9-11 world). Yahoo! went on to make many more valuable deals with companies such as AOL, SBC, and Verizon. The company also made several new acquisitions, such as Inktomi, AltaVista, Overture, and AlltheWeb. Overture is perhaps one of the better known acquisitions – and even if you don’t think you know anything about it, you do. Pretty much every ad on Yahoo! content pages is driven by Overture technology (now officially known as Yahoo! Search Marketing). By 2004, Yahoo! had parted ways with Google, but the damage was already done. From that moment forward, Yahoo! was and has continued to play catch-up to their new rival. We’ll get to Google further up the list.
Despite the pressure from their larger 'brother' Yahoo! has continued to make several acquisitions in the last two years. A new music service launched in February 2005 has proved beneficial for the company, though it pales in comparison to iTunes. Flickr is a popular photo sharing service run by the company, while other select Web 2.0 service companies have also added to their elaborate portfolio. The most notable recently is the social bookmark site del.icio.us.
It’s undeniable that Yahoo! does a lot of things right. It’s also indisputable they’ve made some critical mistakes (like inviting the ‘Big Bad Woolgfe’ to bed). Yahoo! has had its fair share of success stories and failures. One of the most notable failures to me was the disappearance of Yahoo! Auctions. Perhaps it vanished due to the deal with eBay, but it had struggled for a long time and it was no real surprise when it happened. Still, Yahoo! has been playing catch-up to Google Inc. for a while now, and though Yahoo! definitely still has promise and regularly shows why it’s the number one site on the internet, ultimately Yahoo! hasn’t continue to “wow” us like it could or should have.
Yahoo! has seemingly always had the philosophy that more is more, and a look at their homepage (in comparison to Google or Live.com [run by Microsoft]) is proof of this. But the less is more approach has also worked at times, and Yahoo! has only recently caught wind of this. The future of Yahoo! is probably a bright one and ultimately a major merger will occur (rumors swirled about them and Microsoft for a while). Yahoo! Search Marketing will likely never turn a profit like Google’s advertising program has for them, but none the less it is good to see Yahoo! can admit another system being better than their own, and ultimately adjusting to the market’s desires. Google’s advertising and search layout model for several years was superior to the Yahoo! model, and that may explain part of the companies ‘failure’ to retain itself as the worlds most popular search engine (a crown which now is, of course, worn by Google Inc.). Yahoo! Search Marketing has also now expanded the program to allow publishers to display ads on their own sites, another step along the Google model which has worked well.
And if all else fails for the company… I’m sure the yodeling guy can get a new job. Some might argue he should have already, but I digress. You love him or hate him:
"Yahoooooo-ooooh-oooh!"
Overall I’d say Yahoo! is definitely one of my favorite companies on the internet. They’re bright, innovative, and in general they just have a warm fuzzy feeling that makes me comfortable when I’m on their website. I grew up with Yahoo! so it’s a part of the internet I’ll always see as essential to have for all things to be right in the world. Of course, while I love Yahoo! – they aren’t my default home page. Like a lot of folks, my heart was stolen by another. And we’ll get to that eventually.
Next time I’ll introduce my number eight pick…
(Continue to #8)
John C. Derrick
Founder
